SPH media profits plunge; introduces ‘integrated’ sales approach to boost ad spend

Profits from Singapore Press Holdings' media segment — its biggest investment arm — dropped by a whopping 44.6% with overall print ad revenue down by 14.9% and circulation revenue dropping 7.3%, according to the company's full year results.

On the upside, the digital revenue from the media arm grew by 13.2% in the year with digital ad revenue showing a 7.3% CAGR (compound annual growth rate) since 2017. From this, digital newspaper ad revenue continues to grow at 6% year-on-year.

Predictably, print circulation fell by 12.2% which was offset by digital circulation which has grown by 19.3%. Print ad revenues also plunged considerably, which the group attributed to a drop in classified ads.

Overall, the publishing group recorded a 23.4% decline in net profit in the financial year ending August 31, 2019, from SG$278,380 (US$203,966) the previous year to SG$213,211 (US$156,217).

Ng Yat Chung, chief executive of SPH, said in a statement: “The media business continues to be challenged with the decline in print advertisement and circulation revenue. But we are seeing progress in our digital transformation strategy in terms of improved digital advertisement and circulation growth.”

With advertisers cutting back on ad spend, the group will be streamlining its media operations in line with a new “integrated sales approach”.

This will result in a streamlining of its media sales and content teams, and has so far resulted in a 5% loss of media staff, or the equivalent of about 130 staff. The exercise is expected to be completed within the current quarter and will incur retrenchment costs of approximately SG$8 million (US$5.8 million).

Once again, the decline in media profits was offset by good performance in SPH’s property segment as well as a slight bump in the aged care segment.